KCB Bank Kenya has lowered its base lending rate to 9.0%, following the Central Bank of Kenya’s recent decision to cut the Central Bank Rate (CBR) and the rollout of the new Risk-Based Credit Pricing Model (RBCPM).
The change, which took effect on December 1, 2025, marks a major shift in how loans will now be priced under the bank’s updated credit framework.
In a public notice, KCB said the new rate will immediately apply to borrowers taking new facilities. “New local currency-denominated variable-rate loans taken from December 11, 2025, will be priced on a base rate of 9.0%,” the bank announced.
Each borrower’s final lending rate will then be determined by adding a customer-specific risk margin, as required by the new model.
The bank explained that the adjustment is part of efforts to align with CBK’s monetary policy direction. By lowering the CBR to 9.0%, the regulator signaled room for easing credit conditions, and commercial banks are now required to reflect that shift in their pricing.
However, the rollout will not affect all customers at once. KCB said loans that were applied for from December 1, 2025, will be revised “upon the expiry of the 30-day notice period as required by CBK,” meaning borrowers will see the changes after the mandatory notification window lapses.
Existing customers will also transition, but gradually. According to the bank, “All existing local currency variable-rate loans taken before December 1, 2025, will continue under the current terms and will transition to the new framework by the end of the CBK-mandated transition period (February 28, 2026).”
KCB added that customers will be fully informed of any changes to their loan terms, emphasizing transparency during the transition. “All applicable fees, charges, and the total cost of credit will be fully disclosed to customers in line with the CBK requirements,” the notice read in part.
The bank expressed gratitude to its customers for their continued loyalty during the shift in policy. “We thank you for your continued support and trust in KCB as your preferred financial partner,” it said, urging clients to contact their Relationship Managers, the contact center, or any branch for clarification.
KCB becomes one of the first major lenders to publicly confirm adjustments under the new risk-based pricing rules, setting the tone for similar changes across the banking sector.
